LIABILITY CONCERNS TEMPER CONTENT OF REFERENCES

The fear of lawsuits is causing U.K. employers to change some of their recruitment methods, a recent employment survey indicates.

Employee references given by previous employers are a particular concern, according to the survey by London-based Industrial Relations Services, an independent employment research organization.

Twenty-eight percent of the 157 employers responding to the survey have "changed their policy in supplying or requesting references over the last two years," the organization said. The employers surveyed in total employ more than 333,000 workers.

According to the survey, of those changing their policy because of concern about employers liability:

One in five now limit the content of references to factual information.

One in 10 have stopped line managers from issuing references and now only provide them from the human resources department.

A few have begun to include liability disclaimers on all references supplied.

This change reflects "the degree of concern about the quality of references and the publicity that recent legal cases have generated," according to Rachel Gooch, a research officer at Industrial Relations and the survey's author.

While "almost all of the employers in (the) survey are usually willing to provide current and former employees with references, there is a growing caution among employers about" their content, she said.

U.K. employers used to hold a "qualified privilege" in writing references, meaning a former employee could only use the contents of the reference against companies if their was proof that the former employers acted with malice in writing the reference. But in a 1994 decision in a case involving a former agent suing Guardian Assurance P.L.C. over a reference, the House of Lords eroded that privilege by saying that negligently prepared references are not entitled to that protection (BI, July 25, 1994).

Employers "are under a duty to take reasonable care in giving a reference and could be liable if a recruiting employer suffers a loss because of negligence on the part of the referee," according to the report.

Potential losses could arise if a previous employee writes a positive reference for a poor-quality or problematic employee who is hired based on that reference.

Also, "referees have a duty of care to their employee and ex-employees when writing references for them. It is these concerns that have made employers much more wary about providing references," the report explains.

The survey reveals a clear problem employers have with references, according to the research organization. "On the one hand, employers' fears of legal action make them restrict the information that they supply. But, on the other, they are still keen to receive references that give detailed opinions on candidates," the report concluded.

The law also is prompting employers to revise their application forms.

"More than a third, 36.7%, of employers have made changes to their application form in the last two years and a further 4.8% currently have their forms under review," the survey said.

Although employers tend to keep the content of the forms continually under review, "currently the major impetus for changing application forms is the Disability Discrimination Act 1995, the main employment provisions of which came into force on Dec. 2, 1996," the organization said.

"Questions relating to a candidate's disability now are usually asked in a detachable, equal opportunities monitoring questionnaire that is not made available" to those making hiring decisions," the report said.

Many other changes to application forms also relate to equal opportunities issues, such as removing questions relating to children and marital status. Altogether, "more than seven out of 10 employers that have made changes to their forms have done so, at least in part, for reasons of equality," the survey report revealed.

Copies of the survey, "The State of Selection: An IRS Survey," cost 30 pounds ($49) and are available from IRS, 18-20 Highbury Place, London N51QP UK.